Alpha Metallurgical Resources, Inc. · NYSE:AMR
Alpha Metallurgical Resources — Contura Energy — Investor Presentation (February 2020)
34 slides from Alpha Metallurgical Resources's investor presentation, Feb 10, 2020
Slide 1: Contura Energy: Investor Presentation February 2020
Exhibit 99.2 Contura Energy: Investor Presentation February 2020 1
Slide 2: Certain Financial Results
Certain Financial Results This presentation contains certain financial results for the three months and year ended December 31, 2019. This information is preliminary, unaudited and subject to material revision, and the company cautions investors and potential investors not to place undue reliance up
Slide 3: Forward Looking Statements
Forward Looking Statements This document includes forward-looking statements. These forward-looking statements are based on Contura's expectations and beliefs concerning future events and involve risks and uncertainties that may cause actual results to differ materially from current expectations. Th
Slide 4: Table of Contents
Table of Contents Company Overview 5 Leadership Introduction & Vision 13 Operations & Capital Projects Overview 17 Financial Highlights 20 Conclusion 23 Appendix 25 4
Slide 5: Company Overview
Company Overview <
Slide 6: Contura Investment Thesis & Highlights
Contura Investment Thesis & Highlights Investment Thesis Levered to a market turn-around given scale, Favorable asset and market position strategic asset base and cost position Leading management team to take advantage Significant liquidity and cash position of Contura’s key strategic strengths to (
Slide 7: Contura Snapshot
Contura Snapshot . Largest met coal producer in the United States with a premier NAPP thermal coal operation and a high quality CAPP thermal business Pennsylvania . Operating footprint of 10 preparation plants with 23 metallurgical coal mines and 6 thermal coal mines(1) Maryland . Diversity of opera
Slide 8: Largest and Most Diverse Public Producer of Met Coal in the U.S.
1 Largest and Most Diverse Public Producer of Met Coal in the U.S. 2018 Volumes (million tons)(1) 2019 Preliminary Full-Year Coal Revenue Mix(2) 2020E Met Volumes High Vol 11.6 Mid Vol Met: 74% 8% 14% Low Vol CAPP - HVA Met 13% 26% 44% HVB CAPP - MV Thermal 7.9 7.7 LV 7.6 74% NAPP 22% Estimated 2020
Slide 9: Long Mine Lives and Substantial Organic Reserve Growth Opportunities
2 Long Mine Lives and Substantial Organic Reserve Growth Opportunities Met Reserve Life of Public U.S. Met Coal Producers Implied Reserve Life (Years)(1) 60+ 57 29 22 14 9 Peer 5 Contura Peer 1 Peer 4 Peer 3 Peer 2 Low Cost Met Projects Est. Production Est. Cost (mm tons / of Coal Quality year)(2) S
Slide 10: Operational Excellence
3 Operational Excellence Cost Reduction Objectives . Reduce operational overhead and operating expenses by CAPP – Met Mine Cost approximately $20(1) million in 2020 Improvement Targets (2) . Improve captive mine costs by ~$5 / ton $83.50 ~$4 . Operational cost guidance for 2020 remains as previously
Slide 11: Advantaged Sales & Logistics Platform
4 Advantaged Sales & Logistics Platform Contura’s Sales & Logistics platform is anchored by its stake in the world-class Dominion Terminal Associates (DTA), which facilitates access to international coal markets, coupled with its extensive logistics network Capabilities of DTA Access to Extensive Lo
Slide 12: Well Positioned for Opportunistic Growth
5 Well Positioned for Opportunistic Growth Contura Met Prep Plants Regional Met Competitor Complexes . Contura is well positioned to expand its metallurgical operating position in the Appalachian region given its: Pennsylvania Geographic footprint Financial flexibility Maryland Market knowledg
Slide 13: Leadership Introduction & Vision
Leadership Introduction & Vision
Slide 14: Members of the Management Team
Members of the Management Team David J. Stetson Andy Eidson Jason E. Roger L. Daniel Horn William Davison Chairman & CEO EVP and CFO Whitehead Nicholson SVP and Head of SVP and Head of EVP and COO EVP, General Counsel Metallurgical Coal Sales Thermal Coal Sales and Secretary . Has served as . Has se
Slide 15: Contura Vision 2020
Contura Vision 2020 1 . Continue focusing on safe, environmentally sound operations . Continue to lower costs and increase operational efficiencies by: Operational Focus . Improving feet/shift at mines . Increasing organic yields and throughput at prep plants . Leveraging larger scale to improve log
Slide 16: Our Commitment to Safe, Responsible Operations
Our Commitment to Safe, Responsible Operations Responsible Environmental Stewardship . Strong 99.9% compliance rate with all federal and state water quality standards since 2016 . Reclaimed ~3,500 acres and planted ~2.0 million trees since 2016 . Received numerous environmental awards for reclamatio
Slide 17: Operations & Capital Projects Overview
Operations & Capital Projects Overview
Slide 18: Low Cost Metallurgical Projects
Low Cost Metallurgical Projects Overview of Metallurgical Projects • Significant progress on multiple metallurgical coal projects with expected direct mining costs at or below $70 per ton: • Contributes to driving average CAPP – Met cost of coal sales below $80 per ton in 2020 and beyond • Reserve b
Slide 19: Overview of Major Capital Projects in 2020
Overview of Major Capital Projects in 2020 Large Projects and Estimated 2020 Expense by Segment • CAPP – Met • Black Eagle capitalized development ~ $7 million • Lynn Branch carryover ~ $13 million • NAPP • Impoundment, capitalized development, longwall equipment, etc. ~ $50 million Capital Expendit
Slide 20: Financial Highlights
Financial Highlights x
Slide 21: 2020 Operating and Financial Guidance
2020 Operating and Financial Guidance (as of 2/10/20) Shipments (million tons) Low High CAPP – Metallurgical Updated from previously guided range of 12.7 - 13.3 12.0 12.6 CAPP – Thermal Updated from previously guided range of 3.4 - 4.0 2.7 3.3 NAPP 6.0 6.8 Total Shipments Updated from previously gui
Slide 22: Liquidity
Liquidity Beyond cash flows, Contura’s expected sources of liquidity include: Expected Sources of Liquidity(1) (US$ Millions) $35 Unrestricted Cash of $213 Million Asset-Based Revolver $115 $363 Million Capacity of $115 Million $213 Expected AMT Credit (2) Monetization of $35 Million (1) As of Decem
Slide 23: Conclusion
Conclusion
Slide 24: Conclusion
Conclusion Contura presents an attractive opportunity for investors as the Company: 1 Has significant liquidity and cash position as well as discretion over capital spend 2 Compares favorably to its peers given its asset position and market position 3 Levered to a market turn-around given scale, str
Slide 25: Appendix
Appendix February 2020 16
Slide 26: Expected Tax Refunds and Restricted Cash Releases
Expected Tax Refunds and Restricted Cash Releases Significant Tax Benefits Expected/Received(1) 4Q19A 2020E 2021E 2022E (US$ Millions) AMT Credit Monetization(2) $65.3 $35.2 $16.5 $16.5 172(f) 10 Year NOL Carryback - - $64.2 - Total Expected Cash Refunds $65.3 $35.2 $80.7 $16.5 Meaningful Actual Rel
Slide 27: Overview of Select 2020-2023 Estimated Cash Obligations
Overview of Select 2020-2023 Estimated Cash Obligations as of 12/31/19 Payments expected to decline significantly over the next several years once payments for Contingent Revenue and LCC Obligations conclude in 2023 2020 2021 2022 2023 (US$ Millions) Acquisition Related Obligations $20.2 $7.9 $4.2 $
Slide 28: Mid-West Virginia Underground Operations
Mid-West Virginia Underground Operations Underground Mines Allen Powellton, Black Eagle, Horse Creek, 2020 Estimated Production(2) (3) Panther Eagle, Slip Ridge, Slab Camp 1.9 MM Tons Met 1.6 MM Tons Thermal Prep Plants Met Thermal Mammoth (1,200 TPH), Marfork (2,400 TPH) Shipping Options Mid-West V
Slide 29: Mid-West Virginia Surface Operations
Mid-West Virginia Surface Operations Surface Mines Pax, Republic, Workman Creek North, Workman 2020 Estimated Production(2) (3) Creek South 3.3 MM Tons Met Loadouts Pax Loadout (3,500 TPH) Met Shipping Options Mid-West Virginia Surface (MWVS) CSX Rail (Marfork), NS Rail (Mammoth), Vice President – J
Slide 30: West Virginia East Operations
West Virginia East Operations Underground Mines Jerry Fork Eagle, Kingston #1, Kingston #2, Road 2020 Estimated Production(2) (3) Fork 51, Wyoming No. 2 2.2 MM Tons Met Prep Plants Kepler (900 TPH), Kingston (600 TPH), Power Met Mountain (1,200 TPH) Shipping Options West Virginia East CSX Rail, NS R
Slide 31: West Virginia West Operations
West Virginia West Operations Underground Mines Alma, Cedar Grove No. 2, Chilton/Hernshaw, Kielty 2020 Estimated Production(2) (3) Surface Mines 1.2 MM Tons Met 1.3 MM Tons Thermal Black Castle, Highland (Reylas) Prep Plants Met Thermal Bandmill (1,200 TPH), Delbarton (650 TPH), Inman (800 TPH) Ship
Slide 32: Virginia Operations
Virginia Operations Underground Mines Deep Mine 41, Deep Mine 44, Bear Ridge Upper 2020 Estimated Production(2) (3) Banner*, Toms Creek North*, Toms Creek South* 3.4 MM Tons Met Surface Mines 88 Surface, Long Branch Met Prep Plants McClure (1,000 TPH), Toms Creek (1,050 TPH) Virginia Vice President
Slide 33: Pennsylvania Operations
Pennsylvania Operations Underground Mines Cumberland 2020 Estimated Production Prep Plants 6.4 MM Tons Thermal Cumberland (1,600 TPH) Thermal Shipping Options CSX Rail, NS Rail, Monongahela River Barge Pennsylvania Vice President – Ryan Toler Reserves(1) 652 MM Tons (1) Reserve figures are year-end
Slide 34: Reconciliation of non-GAAP cost of coal sales & Adjusted cost of produced coal sold
Reconciliation of non-GAAP cost of coal sales & Adjusted cost of produced coal sold In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These non- GAAP measures are in addition to, not a substitute for or superior to, measures of financial performance
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